Banks agree to lower deposit and lending rates after NHNN meeting

On the afternoon of April 9, the State Bank of Vietnam (NHNN) held a meeting on banking operations with representatives from 46 commercial banks. Comrade Pham Duc An, a member of the Party Central Committee’s Secretariat and Governor of NHNN, chaired the meeting. Deputy Governors of NHNN and leaders of several departments and units under NHNN also attended.

NHNN’s first-quarter monetary and banking management

In the meeting’s report, Pham Chi Quang, Director of the Monetary Policy Department, said that in the first three months of the year NHNN actively and flexibly managed monetary policy to stabilize the macroeconomy, control inflation, and support growth.

He noted that NHNN conducted flexible open market operations with appropriate volumes and varied maturities to support liquidity and stabilize the money market. NHNN also managed the exchange rate and the foreign exchange market to absorb shocks, and coordinated policy tools—including selling foreign exchange interventions—to help maintain foreign exchange market stability and inflation control.

Credit growth target and lending direction

On credit, NHNN aligned with government directions by setting a 15% credit-growth target for the banking system. Banks were urged to tightly control growth in potentially risky sectors, especially real estate, while directing funding toward productive activities, priority sectors, and growth drivers, in line with risk-management capacity to limit rising bad debts and ensure safe operations.

By the end of March, system-wide credit increased by about 2.65% to 19.08 quadrillion dong.

Policy rates kept unchanged

NHNN also continued to keep policy rates unchanged to allow banks to access low-cost funds from NHNN to support the economy.

Challenges and banks’ response

The report highlighted that global developments have become complex and unpredictable. Escalating geopolitical tensions in the Middle East have pushed oil prices higher and increased inflation pressures, while domestic liquidity remained robust to support growth. These conditions have created challenges for monetary policy implementation and banking operations, with deposit and lending rates generally trending upward.

Against this backdrop, NHNN convened the meeting. Banks reached broad consensus on implementing the government’s policy to reduce market rates to support enterprises and people. Accordingly, banks pledged to lower deposit and lending rates following the meeting.

NHNN’s monitoring and supervision

Governor Pham Duc An emphasized that NHNN will continue to closely monitor movements in deposit and lending rates and publish lending rates on banks’ websites. He said NHNN has policy tools ready to adjust monetary policy and provide liquidity support to banks as needed.

At the same time, NHNN will strengthen supervision to ensure banks comply with the government’s policy on deposit and lending rates, and will strictly sanction violations related to mobilizing funds and extending credit.

Source: Quynh Trang, The Banking Times